“Do not save what is left after spending, but spend what is left after saving.”
— Warren Buffett, “The Oracle of Omaha”
The idea of paying yourself first has always resonated with me. Of course, even for those who follow the Oracle of Omaha’s suggestion, saving for every goal is not always possible early on. At the start of your career, you’re typically juggling several goals: building up your rainy-day fund, paying off student loans, saving for that first home purchase, and putting away what you can for retirement. Even though retirement could be four decades away, the power of compounded earnings over time is truly remarkable, so it’s worth starting as early as possible! For some, the cost of raising and educating children is added to the puzzle. Since your earnings typically peak later in your career, managing these goals on a lower salary is challenging.
Retirement plan catch-up contributions were introduced in 2001 to help people age 50 years and older put away more in tax-advantaged accounts. Each account type has unique catch-up limits, amounts, and, in some cases, ages. There are various provisions to consider in each instance. We recommend working with your advisors for guidance navigating these important decisions.
Traditional and Roth IRAs
The annual catch-up contribution limit for IRAs in 2025 is $1,000 for those turning 50 years or older in the calendar year. This is in addition to the $7,000 potential regular contribution limit, allowing you to put up to $8,000 away. Subject to specific provisions, if you’re married, your spouse may be able to establish and contribute to a spousal IRA to save for retirement and take advantage of the catch-up, if eligible.
401(k), Roth 401(k), 403(b) or Other Workplace Retirement Plans
The catch-up is larger for those who participate in workplace retirement plans. For 2025, plan participants age 50 and over can contribute an additional $7,500. Combined with the regular employee contribution limit of $23,500, this makes a potential $31,000 in contributions.
Individuals maxing out their workplace plan may be able to contribute even more if the plan allows for after-tax contributions. Please see our article Mega Backdoor Roth Contributions for more details on this powerful savings technique.
The SECURE Act 2.0 of 2022 contained over 90 provisions designed to encourage increased savings toward retirement, improve retirement plan flexibility, and make it more attractive for smaller employers to offer retirement plans. As of 2025, individuals between the ages of 60 and 63 will be allowed to make enhanced catch-up contributions capped at the greater of 1) $10,000 (indexed for inflation) or 2) 150% of the regular catch-up contribution (this equals $11,250 in 2025, or 1.50 x $7,500). These plan participants can contribute $34,750 as opposed to $31,000.
There is one caveat to higher earners starting in 2026: If you earned more than $145,000 from that employer in the prior calendar year, the 50+ catch-up contribution will need to be made to the Roth portion of the 401(k) or 403(b) using after-tax dollars. Those who earned $145,000 or less, indexed for inflation going forward, can choose whether the catch-up contribution is made with pre-tax or after-tax dollars. Originally scheduled to take effect in 2024, this rule will now apply beginning in the 2026 tax year following a transition period due to the complexities of implementation. See the IRS announcement for more information.
Our article, SECURE Act 2.0 — A Boost for Retirement Savers, details some of the other provisions that may impact you.
Health Savings Accounts
Health Savings Accounts (HSAs)—highly tax-advantaged savings vehicles designed for current and future medical expenses—also have catch-up provisions (see Health Savings Accounts: Desirable, Despite the Complexity). For 2025, individuals age 55 and older can contribute an additional $1,000. This is in addition to the regular contribution limits of $4,300 for individuals and $8,550 for families. If you and your spouse are both enrolled in a high-deductible health plan, not enrolled in Medicare or an FSA, and meet the age requirement, you can each make a $1,000 catch-up contribution. However, it’s important to note that each spouse’s catch-up contribution must be made to an HSA in their own name. This may require strategic planning to ensure funds for medical expenses are available in the appropriate account and that contributions do not exceed the annual limit.
| Catch-up Age & Amount by Account Type for 2025 |
| Account Type |
Regular Contribution Limit |
Catch-up Age |
Catch-up Contribution |
Total Contribution |
| 401(k), 403(b), etc. |
$23,500 |
50+ |
$7,500 (50+) |
$31,000 (50+) |
60 to 63
(enhanced catch-up) |
$11,250
(ages 60 to 63) |
$34,750
(ages 60 to 63) |
| Traditional & Roth IRA |
$7,000 |
50+ |
$1,000 |
$8,000 |
| Health Savings Account (HSA) |
$4,300 (single)* |
55+ |
$1,000** |
$5,300 (single) to a potential $10,550 (family) |
| $8,550 (family)* |
*HSA limits include employer contributions
**Each spouse age 55+ can make a $1,000 catch-up contribution to an HSA plan in their own name. |
This article focuses on catch-up provisions that apply to the broadest group. Don’t hesitate to contact your team at Bragg Financial if you’d like to discuss the nuances of your specific planning situation. Thank you for trusting Bragg Financial Advisors with your planning and investing.
This information is believed to be accurate at the time of publication but should not be used as specific investment or tax advice as opinions and legislation are subject to change. You should always consult your tax professional or other advisors before acting on the ideas presented here.
Bragg Welcomes Gigi Becker
February 12, 2025— Warren Buffett, “The Oracle of Omaha”
The idea of paying yourself first has always resonated with me. Of course, even for those who follow the Oracle of Omaha’s suggestion, saving for every goal is not always possible early on. At the start of your career, you’re typically juggling several goals: building up your rainy-day fund, paying off student loans, saving for that first home purchase, and putting away what you can for retirement. Even though retirement could be four decades away, the power of compounded earnings over time is truly remarkable, so it’s worth starting as early as possible! For some, the cost of raising and educating children is added to the puzzle. Since your earnings typically peak later in your career, managing these goals on a lower salary is challenging.
Retirement plan catch-up contributions were introduced in 2001 to help people age 50 years and older put away more in tax-advantaged accounts. Each account type has unique catch-up limits, amounts, and, in some cases, ages. There are various provisions to consider in each instance. We recommend working with your advisors for guidance navigating these important decisions.
Traditional and Roth IRAs
The annual catch-up contribution limit for IRAs in 2025 is $1,000 for those turning 50 years or older in the calendar year. This is in addition to the $7,000 potential regular contribution limit, allowing you to put up to $8,000 away. Subject to specific provisions, if you’re married, your spouse may be able to establish and contribute to a spousal IRA to save for retirement and take advantage of the catch-up, if eligible.
401(k), Roth 401(k), 403(b) or Other Workplace Retirement Plans
The catch-up is larger for those who participate in workplace retirement plans. For 2025, plan participants age 50 and over can contribute an additional $7,500. Combined with the regular employee contribution limit of $23,500, this makes a potential $31,000 in contributions.
Individuals maxing out their workplace plan may be able to contribute even more if the plan allows for after-tax contributions. Please see our article Mega Backdoor Roth Contributions for more details on this powerful savings technique.
The SECURE Act 2.0 of 2022 contained over 90 provisions designed to encourage increased savings toward retirement, improve retirement plan flexibility, and make it more attractive for smaller employers to offer retirement plans. As of 2025, individuals between the ages of 60 and 63 will be allowed to make enhanced catch-up contributions capped at the greater of 1) $10,000 (indexed for inflation) or 2) 150% of the regular catch-up contribution (this equals $11,250 in 2025, or 1.50 x $7,500). These plan participants can contribute $34,750 as opposed to $31,000.
There is one caveat to higher earners starting in 2026: If you earned more than $145,000 from that employer in the prior calendar year, the 50+ catch-up contribution will need to be made to the Roth portion of the 401(k) or 403(b) using after-tax dollars. Those who earned $145,000 or less, indexed for inflation going forward, can choose whether the catch-up contribution is made with pre-tax or after-tax dollars. Originally scheduled to take effect in 2024, this rule will now apply beginning in the 2026 tax year following a transition period due to the complexities of implementation. See the IRS announcement for more information.
Our article, SECURE Act 2.0 — A Boost for Retirement Savers, details some of the other provisions that may impact you.
Health Savings Accounts
Health Savings Accounts (HSAs)—highly tax-advantaged savings vehicles designed for current and future medical expenses—also have catch-up provisions (see Health Savings Accounts: Desirable, Despite the Complexity). For 2025, individuals age 55 and older can contribute an additional $1,000. This is in addition to the regular contribution limits of $4,300 for individuals and $8,550 for families. If you and your spouse are both enrolled in a high-deductible health plan, not enrolled in Medicare or an FSA, and meet the age requirement, you can each make a $1,000 catch-up contribution. However, it’s important to note that each spouse’s catch-up contribution must be made to an HSA in their own name. This may require strategic planning to ensure funds for medical expenses are available in the appropriate account and that contributions do not exceed the annual limit.
(enhanced catch-up)
(ages 60 to 63)
(ages 60 to 63)
**Each spouse age 55+ can make a $1,000 catch-up contribution to an HSA plan in their own name.
This article focuses on catch-up provisions that apply to the broadest group. Don’t hesitate to contact your team at Bragg Financial if you’d like to discuss the nuances of your specific planning situation. Thank you for trusting Bragg Financial Advisors with your planning and investing.
This information is believed to be accurate at the time of publication but should not be used as specific investment or tax advice as opinions and legislation are subject to change. You should always consult your tax professional or other advisors before acting on the ideas presented here.
SEE ALSO:
Mega Backdoor Roth Contributions–A Compelling Savings Technique for Some 401(k) Participants, Published February 12th, 2021 by Marc Scavo, CFP®, CRPC®SECURE Act 2.0—A Boost for Retirement Savers, Published March 22nd, 2023 by Marc Scavo, CFP®, CRPC®
Health Savings Accounts: Desirable, Despite the Complexity, Published October 2nd, 2018 by Mary Lou Daly, CPA, CFP®
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